Have you ever been involved in a car accident and wonder whether you should tell it your car insurance company and make a claim on your car insurance or pay the amount from your own pocket?
In Singapore, most people avoid filing a car insurance claim, especially if it is a minor accident that has either caused no injuries or it hasn’t damaged your vehicle too much. This happened because there is a fear in the driver’s mind that if he files a car insurance claim, then that will trigger an increase in his car insurance rates. People usually prefer negotiating and settling the damage amount out-of-pocket and going to local car workshops in Singapore to get it repaired rather than that risking going to an insurer and having their annual premiums increased.
If you are thinking about NO Claims Discount (NCDs) – it is an entitlement given to you if you have no claims under your policy for a year or more with the existing insurer. It helps you to reduce the premium you are required to pay for the insurance in the next following year.
It is not necessary that if you make a car insurance claim, you will automatically lose your NCD. Your NCD may not be affected if you are found totally not at fault in an accident involving another vehicle. If there is a claim under your policy, your NCD will reduce by a set percentage. Suppose your current NCD is 50% and you had 1 claim for the year, your NCD will drop to say 40%. If you are making more than 1 claim in a year then your NCD will be affected and it may even be reduced to 0%. Some insurers offer protection on your NCD – please refer to that before taking a decision of not making a claim and putting yourself in trouble later.
Not filing a claim can bring severe consequences to you in some cases. Let’s tell you in greater detail what can happen to you if you don’t file a claim.
When you are involved in a car accident with another vehicle it’s always better to contact the insurance company right away. Your insurance company can help you to pay any damage during the course of your driving. It can also help in paying off the legal defense costs if you go to court. If you try to settle it out-of-pocket it can bring trouble to you later as if the other driver realizes later he has gone to a car workshop in Singapore for repair and gets to know that the damage is actually more extensive than it was initially believed. Also, if you failed to report the accident and the other driver claims for related injuries, your insurer may deny covering the amount.
Car repairing bills can be higher than what you think they would. So, it’s always better to get your insurance company to help you with the claim. No one wants the car insurance rate that they pay to increase, but if you are hiding that and paying the cost from your own pocket you can bring more trouble to yourself later. This is the reason the insurance company in Singapore recommends you to report the car accident as soon as it happens. Even if your rates increase, you can work with your insurer to reduce it over time by making sure that your driving record is clear without any traffic tickets or accidents.